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Title: Polestar Sets Sights on SUV Production in Europe's Automotive Market

Title: Polestar Sets Sights on SUV Production in Europe's Automotive Market

Rewritten Article:

Hey there! Let's talk about Polestar, the Swedish electric vehicle (EV) brand, and its ongoing challenges and plans for the future.

Polestar, a subsidiary of Chinese conglomerate Geely, is manufacturing its first-ever European car – the Polestar 7 – in Sweden. Polestar CEO Michael Lohscheller explained that the move would cut production costs and protect the company from tariffs. Currently, Polestar manufactures in China and the US, primarily in Chinese factories and with Volvo in the US. However, the exact European location and timeline for production haven't been decided yet.

Polestar has faced a rough patch, with a 15% decline in car sales in 2024 compared to the previous year. On the stock market, the company took a hit, with shares dropping more than 10% in New York. Despite these challenges, Lohscheller has ambitious plans for Polestar's future – he envisions the company growing its annual sales by 30-35% on average between now and 2027 and reaching the break-even point in earnings before interest, taxes, depreciation, and amortization (EBITDA) this year.

To get there, Polestar is reducing its workforce by around 25% and aiming to become financially independent by 2027. The company also plans to generate revenue from the sale of CO2 certificates, with earnings forecasted in the hundreds of millions this year.

Polestar's challenges in the US are different. The US government is planning to ban the sale of connected cars from manufacturers under Chinese control from the 2027 model year. While Polestar produces cars in South Carolina, its largest shareholder, Chinese Geely, and founder, Li Shufu, own a majority stake. Lohscheller is optimistic about finding solutions: "We will find solutions," he said, acknowledging the US as a significant market.

Polestar has faced financial challenges, including earnings in the red, significant debt, and cash flow issues. However, the company is pushing ahead with its growth strategy, planning to expand its product lineup and focusing on operational improvements to remain competitive.

In the broader picture, Polestar is grappling with intense market competition and accounting errors that require financial restatements. But the company remains committed to its expansion into new markets and production facilities, showcasing a proactive approach to regulatory compliance.

That's a wrap! Polestar is navigating tough times, but its CEO is confident about the company's future.

Manufacturers like Geely are essential in Polestar's operations, as they are the parent company of the electric vehicle brand. Despite facing challenges, such as a 15% decline in car sales and financial struggles, Polestar's manufacturers continue to support its growth strategy, aiming to expand its product lineup and improve operations.

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